DUBAI - Fujairah.

A 95,000 b/d refinery closed in 1998 was due to be restarted recently in accordance with an agreement with Metro Oil Corp. of Greece and its principal investors signed in late January 2000. It was said subsequently that the refinery would also have a 20,000 b/d condensate splitter built in

the near future. Metro collapsed in February 1998, with debts of between $200-300m, soon after completing a 60,000 b/d expansion at the refinery. In November 1999 Metro was reported to have reached agreement with its creditors on forming a new company to take over the refinery. These included Texaco, Banque Nationale de Paris, Credit Lyonnais/Banque Trad, the National Bank of Fujairah and Swiss oil trader Glencore.

On Jan. 29, 2000 the government of Fujairah and Metro's creditors signed an agreement to reschedule $150m of debt, paving the way for a resumption of the refinery's operations. In a statement the government said a new venture, Fujairah Refinery Co., was to be granted a licence to operate the plant. It gave no details on the shareholding structure for the new firm, apart from saying an international company was to be involved in running the refinery. The statement added that the new venture would build new jetties in co-operation with the port of Fujairah and would upgrade the refinery to produce kerosine, jet fuel, gasoline and naphtha. It was later disclosed that Texaco and Glencore would supply the plant with crude oils.

The refinery, a relocated second-hand plant, began operating in October 1995 and came on stream in January 1996 with a capacity of 35,000 b/d. It had a 20,000 b/d vacuum unit. In October 1997, a 42,000 b/d crude and condensate distillation unit was commissioned at the refinery. A further expansion to 95,000 b/d was done in the subsequent months. It produced heavy kerosine, gasoline and bankers.

The crude oil was supplied by Texaco from its production in the Divided Zone between Saudi Arabia and Kuwait. Installation work on the refinery began in September 1994. The venture was originally conceived by Metro to meet increasing bunker fuel requirements, with Fujairah aiming to become the world's leading bunkering centre (see OMT).